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General fund revenue account outturn: supplementary guidance on adequate validation explanations

Updated 18 May 2023

Applies to England

We have had requests for guidance on what details are expected in explanation comment boxes in the forms.

Where a value entered is substantially different from comparator data, or when a value which appears to be invalid, then a message appears on the form asking for an explanation. We repeat these checks in our data bases and we chase up wherever an adequate explanation has not been provided.

What is required for an adequate explanation

An adequate explanation is a comment that is specific and which:

i) gives details of what is the cause of most of the variance relative to a comparator figure. In the case of change in service expenditure, the descriptions should describe the change in services provided or eligibility. If there are several notable large components, then each should be listed with their approximate size.

ii) explains why a figure has taken an unexpected value (e.g. zero / positive / negative. A number of the data items would not normally be of certain values.

Please note that in our returns that updates/corrections for previous time periods should be addressed by editing the data for the previous period, not by an adjustment in a later period.

Examples of good explanations from RO 2019-20:

“The Council expects to receive additional income of £xxm relating to the introduction of a Clean Air Zone.”

“Bus lane enforcement: 19/20 (£x,xxx k) vs 18/19 (xx,xxx k), variance £x,xxx k or (xx %) - over £1.5 million and 15% different to last year. Mainly due to reduction in Penalty Charge Notice (PCN) income £x,xxx k, partially offset by reduction in running exps (£x,xxx k). PCN income reduced due to reduced traffic for parts of year caused by: COVID 19 lockdown from mid March 2020; closure of Oxford Road bus gate during installation of improved signage; closure of some cameras due to vandalism; and greater awareness of bus gate by motorists.”

“In 18/19 in error this service line included x.xm of rent rebates to HRA tenants - mandatory payments which should have been included on line 713 on the RS tab.”

“Housing benefits: non-HRA rent rebates - mandatory payments: 19/20 £xx,xxx k vs 18/19 £xx,xxx k , variance £x,xxx k or xx %. Corporate Services - Housing Benefits cost centre Non-HRA Rent Rebates - increase in Rent Rebates £x,xxx k. Due to Increase in the number of people needing to be housed.”

“Homelessness: Administration: 19/20 £x.xm vs 18/19 £x.xm , variance £xxx k or xx %. Adults: increase in Homelessness employee costs for Housing Solution Service £xxx k; Inspections £xxx k (new cost centre in 19/20). As part of budget setting 2019/20 investment was allocated to Homelessness to increase the Homelessness Assessment Team and to create an inspections team to ensure that dispersed accommodation properties were up to standard.”

Inadequate explanations

The most common reason for inadequate explanations is when only a generic comment is provided:

eg 1 “figures reflect new/revised priorities/budget” – this provides no insight as to what has changed. In almost all cases, we would expect some description of the changes, such as brief details of the change in services provided, or the change in eligibility, as appropriate.

eg 2 “last year was incorrect”, or “we are now allocating spend more correctly to the categories”. As well as providing no insight, it is simply an unsubstantiated claim unless it includes an explanation of what type of spend was misclassified previously.

Please be sure to provide brief specific details of the main cause(s) of most of the unexpected figure, and please refer to ‘What makes for an adequate explanation’ above.

Examples of inadequate explanations from RO 2019-20

Example	Deficiency
“Changes from original plan” / “A lot more demand for this support”	No detail provided
“Was zero 18/19”	No description of what this new expenditure or quantity relates to
“Increased costs expected”	Should give some detail of: on what specifically are increased costs expected, and if possible why.